General Electric Co. (GE)

Liquidity Analysis

Difficulty level: Basic

Liquidity ratios measure the company's ability to meet its short-term obligations.

General Electric Co., liquidity ratios

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Current ratio	0.94	0.90	0.87	0.77	1.11
Quick ratio	0.57	0.53	0.55	0.46	0.80
Cash ratio	0.33	0.30	0.32	0.19	0.52

Source: Based on data from General Electric Co. Annual Reports

Ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	General Electric Co.'s current ratio improved from 2012 to 2013 and from 2013 to 2014.
Quick ratio	A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities.	General Electric Co.'s quick ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.
Cash ratio	A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.	General Electric Co.'s cash ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

General Electric Co., current ratio calculation, comparison to benchmarks

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Selected Financial Data (USD $ in millions)
Current assets	45,152	42,232	41,750	33,948	41,103
Current liabilities	47,931	46,947	48,053	44,335	36,876
Ratio
Current ratio¹	0.94	0.90	0.87	0.77	1.11
Benchmarks
Current Ratio, Competitors
3M Co.	1.96	1.70	2.20	2.25	2.01
Honeywell International Inc.	1.50	1.49	1.35	1.31	1.28
Current Ratio, Sector
Diversified Industrials	–	1.11	1.08	1.00	1.25
Current Ratio, Industry
Industrials	–	1.32	1.30	1.26	1.33

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 45,152 ÷ 47,931 = 0.94

Ratio	Description	The company
Current ratio	A liquidity ratio calculated as current assets divided by current liabilities.	General Electric Co.'s current ratio improved from 2012 to 2013 and from 2013 to 2014.

General Electric Co., quick ratio calculation, comparison to benchmarks

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Selected Financial Data (USD $ in millions)
Cash and equivalents	15,916	13,682	15,509	8,382	19,241
Investment securities	84	323	74	18	19
Current receivables	11,513	10,970	10,872	11,807	10,383
Total quick assets	27,513	24,975	26,455	20,207	29,643
Current liabilities	47,931	46,947	48,053	44,335	36,876
Ratio
Quick ratio¹	0.57	0.53	0.55	0.46	0.80
Benchmarks
Quick Ratio, Competitors
3M Co.	1.13	1.01	1.39	1.39	1.33
Honeywell International Inc.	1.01	1.01	0.92	0.89	0.83
Quick Ratio, Sector
Diversified Industrials	–	0.68	0.70	0.62	0.87
Quick Ratio, Industry
Industrials	–	0.78	0.77	0.74	0.83

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

¹ Quick ratio = Total quick assets ÷ Current liabilities
= 27,513 ÷ 47,931 = 0.57

Ratio	Description	The company
Quick ratio	A liquidity ratio calculated as (cash plus short-term marketable investments plus receivables) divided by current liabilities.	General Electric Co.'s quick ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.

General Electric Co., cash ratio calculation, comparison to benchmarks

	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010
Selected Financial Data (USD $ in millions)
Cash and equivalents	15,916	13,682	15,509	8,382	19,241
Investment securities	84	323	74	18	19
Total cash assets	16,000	14,005	15,583	8,400	19,260
Current liabilities	47,931	46,947	48,053	44,335	36,876
Ratio
Cash ratio¹	0.33	0.30	0.32	0.19	0.52
Benchmarks
Cash Ratio, Competitors
3M Co.	0.42	0.45	0.73	0.68	0.74
Honeywell International Inc.	0.47	0.45	0.36	0.30	0.23
Cash Ratio, Sector
Diversified Industrials	–	0.35	0.37	0.25	0.48
Cash Ratio, Industry
Industrials	–	0.35	0.35	0.29	0.37

Source: Based on data from General Electric Co. Annual Reports

2014 Calculations

¹ Cash ratio = Total cash assets ÷ Current liabilities
= 16,000 ÷ 47,931 = 0.33

Ratio	Description	The company
Cash ratio	A liquidity ratio calculated as (cash plus short-term marketable investments) divided by current liabilities.	General Electric Co.'s cash ratio deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level.